Old Second Bancorp Inc (OSBC) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 31, 2017

(NASDAQ:OSBC)

Exhibit 99.1

Contact:

Bradley S. Adams

For Immediate Release

Chief Financial Officer

January 24, 2018

(630) 906-5484

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Fourth quarter 2017 net loss was $2.5 million, reflecting a decrease in earnings of $10.6 million, or 131.1%, from the third quarter of 2017, and a decrease in earnings of $7.5 million, or 150.1%, from the fourth quarter of 2016. 

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A nonrecurring, noncash charge of $9.5 million, or $0.31 per diluted share, was recorded as tax expense in the fourth quarter of 2017, stemming from the late December 2017 enactment of the “Tax Cuts and Jobs Act.”  The act lowered the Federal corporate income tax rate, which caused the Company to record a valuation allowance with respect to its deferred tax asset.  Adjusted earnings for the fourth quarter of 2017, a non-GAAP financial measure, which excludes this nonrecurring tax expense, were $7.0 million, or $0.23 per diluted share. See the discussion entitled “Non-GAAP Presentations” below and the tables on page 14 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent. 

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Net interest and dividend income was $19.4 million for the fourth quarter of 2017, reflecting an increase of $103,000, or 0.5%, from the $19.3 million recorded in the third quarter of 2017, and an increase of $1.9 million, or 10.7%, over the fourth quarter of 2016.  Net interest income continued to be favorably impacted in the fourth quarter of 2017 by the Company’s fourth quarter 2016 acquisition of $221.0 million of loans from the purchase of the Chicago branch of Talmer Bank and Trust (“Talmer”).  Purchase accounting accretion income realized in the fourth quarter of 2017 with respect to such acquisition totaled $213,000, as compared to $265,000 in the third quarter of 2017, and $604,000 in the fourth quarter of 2016.

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The Company recorded provision for loan losses expense of $750,000 in the fourth quarter of 2017, compared to $300,000 in the third quarter of 2017, and $750,000 in the fourth quarter of 2016. 

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Noninterest income was $8.2 million for the fourth quarter of 2017, which reflects growth of $341,000, or 4.3%, over the third quarter of 2017, and a decrease of $244,000, or 2.9%, compared to the fourth quarter of 2016.  The current year linked quarter growth was primarily driven by increases in gains on securities.  The decline in the fourth quarter 2017 compared to the prior year like period was due to reductions in residential mortgage banking revenues, partially offset by increases in gains on securities. 

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Noninterest expense was $16.2 million for the fourth quarter of 2017 which reflects a decrease of $727,000, or 4.3%, as compared to the third quarter of 2017, and a decrease of $1.0 million, or 5.9%, from the fourth quarter of 2016.  The decrease in the current year linked quarter expense is primarily due to reductions in salaries and employee benefits and OREO related costs, partially offset by increased advertising expense. The year over year decrease is primarily due to reductions in salaries and employee benefits and OREO related costs.  

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On December 26, 2017, the Company announced the signing of a definitive agreement and plan of merger to acquire Greater Chicago Financial Corp. and its wholly-owned bank subsidiary, ABC Bank, in an all cash